Oil Price Forecast: Crude Plunges Catches Yearly-Open Support

By :  ,  Sr. Technical Strategist

Crude Oil Technical Forecast: Crude Weekly Trade Levels (WTI)

  • Oil prices break October range lows- weekly momentum turns bearish (first time since July)
  • Crude testing initial support hurdle at 2023 yearly-open - risk is lower below weekly high
  • WTI Resistance 83.02/28, ~85, 90.79 (key) - Support 80.31, 78.68

Oil prices have plummeted to multi-month lows with a 14% decline off the yearly highs now testing support at the objective yearly-open. While the risk remains for crude lower, the focus is on possible downside exhaustion into key support objectives as the bears look to challenge the broader May advance. These are the updated targets and invalidation levels that matter on the WTI weekly technical chart.

Review my latest Weekly Strategy Webinar for an in-depth breakdown of this crude oil setup and more. Join live on Monday’s at 8:30am EST.

Oil Price Chart – Crude Weekly (WTI)

Oil Price Chart - Crude Weekly - WTI Trade Outlook - USOil Technical Forecast - 11-2-2023 

Chart Prepared by Michael Boutros, Technical Strategist; WTI on TradingView

Technical Outlook: In last month’s Crude Oil Price Forecast we noted that the plunge in WTI was, “testing a major level here into the start of the month / quarter- looking for a reaction. From at trading standpoint, the threat remains for a deeper correction while below 90.79.” Price rebounded off the 83-handle early in the month with the recovery registering an intraday high at 90.68 before reversing sharply lower. A two-week decline is testing yearly-open support this today at 80.31 – risk for some inflection here.

Initial resistance now eyed at 83.02/28 backed closely by the weekly high / slope resistance near the 85-handle. A breakout of the September downslope (red) is needed to alleviate further pressure with confluent resistance / broader bearish invalidation steady at the yearly high-week close near 90.79.

A weekly close below the yearly-open exposes the 52-week moving average (currently ~78.47) and critical support at 75.62-77.15- a region defined by the 61.8% Fibonacci retracement of the yearly range and the 100% extension of the September decline (an area of interest for possible downside exhaustion / price inflection IF reached).

Bottom line: Oil prices have plunged into the objective yearly-open and we’re looking for possible inflection off this mark early in the month. From a trading standpoint, the threat remains lower while below this week’s high but we’re on the lookout for an exhaustion low ahead of 75.62 in the coming weeks IF the May advance is to remain viable. Review my latest Crude Oil Short-term Outlook for a closer look at the near-term WTI technical trade levels.

Active Weekly Technical Charts

--- Written by Michael Boutros, Sr Technical Strategist with FOREX.com

Follow Michael on Twitter @MBForex


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